Catalyst Dynamic Alpha Fund Investor Update | February 2019

Catalyst Dynamic Alpha Fund Investor Update February 2019 (CPEAX, CPECX, CPEIX)

Dear Investor:

The Catalyst Dynamic Alpha Fund (CPEAX) was positive for the month of January with a +4.85% return. The S&P 500 TR Index was up +8.01% in January. CPEAX seeks to outperform over the long term and has achieved that objective since inception. For the three-year, five-year, and since-inception periods, the Fund has outperformed the S&P 500 TR Index by 60 basis points (bps), 151 bps, and 155 bps, respectively.

For more than 30 years, the Fund’s investment management team has consistently implemented a high-conviction, high-active-share investment strategy. Accordingly, CPEAX has significantly outperformed its benchmark (net of fees) by employing an alpha-driven, quantitative, and disciplined investment process based on price momentum, relative strength, and sector rotation.

Manager Commentary

After nearly slipping into bear market territory in the fourth quarter, domestic equities recently reestablished their footing and moved swiftly upward. Stocks ended the first month of 2019 more than 8% higher than their level at the outset of the year but remained about 7% below the highs set at the end of the third quarter. The rally has been broad in scope with small capitalization stocks outperforming large and cyclically-oriented companies outpacing defensive-styled firms. While the complexion of this advance lends credence to further propagation, the acute nature of the rally should elicit a degree of skepticism. We continue to believe that equities present a compelling risk/reward profile but caution that short-run volatility could become more pronounced as the longstanding economic advance becomes increasingly nuanced between winners and losers.

During the January equity ascent, CPEAX trailed the broad market rally. For the month, the Fund gained nearly 5%, but lagged behind the 8% rally of the S&P 500. Despite this near-term performance headwind, CPEAX has outperformed the benchmark by more than 1.5% annualized over the past five years. In January, the Fund suffered as a result of a lack of investments in the outperforming Communications Services sector and from poor selection and allocation effects derived from the Health Care sector. While momentum as an investment factor and the stock specific results from the Fund’s Technology investments were strongly positive, these effects were insufficient to overcome the performance drag from Heath Care and Communications Services.

Portfolio turnover was limited. In early January, American Express Company (AXP) was sold with the proceeds of the sale being redeployed to Aflac, Incorporated (AFL). At the close of January, Vale SA (VALE) was sold after the stock came under selling pressure as a result of the dam failure in Brazil. In aggregate, investment allocations in the Fund remain largely unchanged from last month, but significantly broader than the posture at the close of the third quarter. We continue to remain confident in the investment merits of domestic equities and believe that our concentrated, high conviction approach to portfolio management is well suited for a maturing bull market.

We thank you for your continued support.

Sincerely,

Cory Krebs
Portfolio Manager

Catalyst Dynamic Alpha Fund

Performance (%): Ending December 31, 2018

Annualized if greater than a year

Share Class/Benchmark	YTD	1 Year	3 Years	5 Years	Since Inception*
Class A	-4.05	-4.05	9.50	11.30	14.74
Class C	-4.81	-4.81	8.69	10.46	13.88
S&P 500 TR Index	-4.38	-4.38	9.26	8.49	12.70
Class A w/ Sales Charge	-9.57	-9.57	7.36	9.99	13.78
Class I	-3.81	-3.81	9.78	n/a	10.69
S&P 500 TR Index	-4.38	-4.38	9.26	n/a	7.85

*Inception: 12/22/2011 (A & C Share) & 06/06/2014 (I Share)

The Fund’s maximum sales charge for Class “A” shares is 5.75%. Investments in mutual funds involve risks. Performance is historic and does not guarantee future results. Investment return and principal value will fluctuate with changing market conditions so that when redeemed, shares may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. Gross expense ratios are 1.44%, 2.19%, 1.19% for class A, C, and I shares, respectively. To obtain the most recent month end performance information or the Fund’s prospectus please call the Fund, toll free at 1-866-447-4228. You can also obtain a prospectus at www.CatalystMF.com.

There is no assurance that the Fund will achieve its investment objective.

You cannot invest directly in an index and unmanaged index returns do not reflect any fees, expenses or sales charges.

As of January 31, 2019, American Express Company (AXP), Aflac Incorporated (AFL), and Vale SA (VALE) were 4.70%, 0.00% and 3.83% of net assets. Fund holdings are subject to change (and have changed) and should not be considered investment advice.

Important Risk Considerations:

Investors should carefully consider the investment objectives, risks, charges and expenses of the Catalyst Funds. This and other important information about the Fund is contained in the prospectus, which can be obtained by calling 866-447-4228 or at www.CatalystMF.com. The prospectus should be read carefully before investing. The Catalyst Funds are distributed by Northern Lights Distributors, LLC, member FINRA/SIPC. Catalyst Capital Advisors, LLC is not affiliated with Northern Lights Distributors, LLC.

Investing in the Fund carries certain risks. The value of the Fund may decrease in response to the activities and financial prospects of an individual security in the Fund’s portfolio. The Fund is non-diversified and may invest a greater percentage of its assets in a particular issue and may own fewer securities than other mutual funds. The performance of the Fund may be subject to substantial short-term changes. To the extent the Fund invests in the stocks of smaller-sized companies, the Fund may be subject to additional risks, including the risk that earnings and prospects of these companies are more volatile than larger companies. Smaller-sized companies may experience higher failure rates than larger companies and normally have lower trading volume than larger companies. These factors may affect the value of your investment. 4300-NLD-2/19/2019